CCI approves Amazon’s joint acquisition of food retail chain More

The country’s anti-monopoly watchdog has approved private equity firm Samara Capital and e-commerce giant Amazon’s joint acquisition of the Aditya Birla Group’s food retail chain More.

In a tweet, the Competition Commission of India (CCI) said it had given the go-ahead to the acquisition of 99.99% of equity share capital of Aditya Birla Retail Ltd by Witzig Advisory Services Pvt. Ltd.

Witzig is a joint venture controlled by mid-market private equity firm Samara Capital. CCI said it had also approved US-headquartered Amazon’s proposal to pick up a 49% stake in Witzig through a subsidiary called Amazon.com NV Investment Holdings LLC.

RKN Retail Pvt. Ltd and Kanishtha Finance & Investment Pvt. Ltd, the holding companies of Aditya Birla Retail Ltd, had in September announced that it had inked a pact to sell almost 100% of the privately-held retail chain to an entity controlled by Samara.

The deal was struck at an estimated enterprise valuation of Rs 4,200 crore ($580 million then).

The twin approvals come a fortnight after media reports claimed that CCI had sought clarity from Witzig on Amazon’s role in the acquisition and whether it was in compliance with revised rules on foreign direct investment in e-commerce.

The new norms state that an entity in which an e-commerce venture has a stake cannot sell goods on the platform with effect from February 1 2019. Furthermore, e-commerce ventures are not permitted to control inventory on their platforms.

This could affect Amazon’s potential plans to integrate More with its online operations and expand its Indian grocery retail business for which it had earmarked $500 million last year. 

Earlier this week, Amazon had reportedly sought an extension of the deadline for implementation of the new FDI norms.

ABRL, part of diversified conglomerate Aditya Birla Group, runs 523 supermarkets and 20 hypermarkets under the More brand, its website shows. It is the fourth-largest supermarket chain in the country after Reliance Retail Ltd, Future Group and D-Mart.